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Energy Conservation
"He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention."
Adam Smith
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Central Hudson Gas
& Electric Corp.


Public Service Commission
of New York
Energy Conservation

Justice Rehnquist Dissent
June 20, 1980
Seal Of The Supreme Court

The Court today invalidates an order issued by the New York Public Service Commission designed to promote a policy that has been declared to be of critical national concern. The order was issued by the Commission in 1973 in response to the Mideastern oil embargo crisis. It prohibits electric corporations "from promoting the use of electricity through the use of advertising, subsidy payments ... or employee incentives." State of New York Public Service Commission, Case No. 26532 (Dec. 5, 1973).

Although the immediate crisis created by the oil embargo has subsided, the ban on promotional advertising remains in effect. The regulation was reexamined by the New York Public Service Commission in 1977. Its constitutionality was subsequently upheld by the New York Court of Appeals, which concluded that the paramount national interest in energy conservation justified its retention.

... An ostensible justification for striking down New York's ban on promotional advertising is that this Court has previously
rejected the "highly paternalistic" view that government has complete power to suppress or regulate commercial speech. "[P]eople will perceive their own best interests if only they are enough informed and ...the best means to that end is to open the channels of communication, rather than to close them."
Whatever the merits of this view, I think the Court has carried its logic too far here. The view apparently derives from the Court's frequent reference to the "marketplace of ideas," which was deemed analogous to the commercial market in which a laissez faire policy would lead to optimum economic decision making under the guidance of the "invisible hand." See, e.g., Adam Smith, WEALTH OF NATIONS (1776).

Text Excerpt:


Every individual ... generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.